For Biden’s climate plans, now the hard work begins

For those who questioned the sincerity of President Joe Biden’s rhetoric around addressing climate change, his first few weeks in office has likely cast those doubts aside. Biden has signed more executive orders (over 50 as of this writing) than any president before him. The most prominent ones include re-joining the Paris Agreement and revoking the permit for the controversial Keystone XL pipeline. For climate-concerned voters, Biden has delivered – so far. However, Biden campaigned on a very ambitious climate agenda, and his voters expect more than just Trump-era rule reversals. Biden’s rhetoric thus creates an interesting political problem for his administration, as relying on a Congress that is controlled by his party by the slimmest of margins to further this agenda will be no easy task. 

Convincing Republicans to get on board with all his climate initiatives is a futile exercise. If Biden wants to make meaningful progress on climate action, change will have to come incrementally, as Democrats do not have the votes to pass legislation without Republican support. Given this dynamic, Biden will likely first look for any paths of least resistance that can match his rhetoric. Two issues that could fit this bill are electric vehicles and carbon pricing. 

Focusing on electric vehicles (EVs) makes sense for Biden for several reasons. First, the private sector is already on board - Ford recently announced a $29 bn investment in electric and autonomous vehicles, GM has committed to only selling zero-emission cars and trucks by 2035, and Tesla is leading the global EV market. Second, Biden can quickly reimpose or increase fuel efficiency standards that were weakened under the Trump administration. The framework of the federal fuel economy rules, which were designed to incentivise automakers to increase their vehicles’ fuel efficiency, already exists and can be tightened. This has an added benefit of giving automakers the political cover to pursue more aggressive electric vehicle agenda and provide companies with the backing of the federal government in ways they did not over the past four years. 

Electric vehicles also impact two other critical areas that the Biden administration has pledged to address - manufacturing and infrastructure. Pushing automakers to increase their manufacturing capacity for electric vehicles creates good jobs in the US - the sort of jobs Republicans can’t turn their backs on - especially in states where auto manufacturing is a major job provider, such as Alabama, Texas, Kentucky, Ohio, Indiana and Michigan. Legislation which boosts manufacturing capacity would also garner bipartisan support in Congress. Of course, electric vehicles need charging stations and supporting infrastructure, and this demand could be the impetus for a larger bill that focuses on putting people to work on shovel-ready jobs, something the country will desperately need in the coming years.

Instituting a national carbon market will prove to be more difficult but is by no means impossible. Republicans in the past have called for such a measure, and it was one of former Arizona Senator John McCain’s principal solutions to address climate change during his 2008 presidential campaign. However, both parties have strayed away from the issue for various reasons – Democrats have cast the solution aside in favour of more ambitious and large-scale ideas, while Republicans have largely resorted to opposing Democratic proposals without countering with any of their own. As demographics change, Republican lawmakers are becoming increasingly aware that this trajectory is untenable in the long run. Solutions where carbon prices are developed from a market-based approach offer an opportunity to change the GOP’s narrative around climate change and the environment.  

Not to say it will be simple – far from it. Any carbon pricing bill will require significant buy-in from both sides and a fervent spirit of cooperation, something that has eluded both parties for years. Measures like the Energy Innovation and Carbon Dividend Act, introduced by Florida Democrat Ted Deutch in 2019 which would institute a carbon price of $15 per ton that increases by $10 each year would be dead on arrival if it were reintroduced as-is (of the 86 co-sponsors, only Francis Rooney, who is no longer in Congress, was a Republican). Republicans will only come to the table if measures embrace market-based solutions, such as replicating cap and trade measures that some states have. Democrats need to be nuanced in their proposals if both parties are to find policy areas where tangible, bipartisan progress can be made on a traditionally partisan issue. The result, a federally-created carbon market, could satisfy voters on both sides.